Below Poverty Threshold

The federal poverty threshold is established annually by the U.S. Census Bureau to measure the number of people in poverty. It calculates an income cutoff (or threshold) for poverty based on the number of adults and children in a household. Any household having an income below 100 percent of the threshold is considered to be in poverty.

A separate “poverty guideline” is established each year by the Department of Health and Human Services (HHS) for administrative and federal program eligibility purposes. The HHS poverty measure provides a simplified guideline based on the number of individuals in a family, regardless of their age. These guidelines apply to the 48 contiguous states and the District of Columbia (the states of Alaska and Hawaii have higher guidelines due to elevated cost of living). In 2019, the federal poverty guideline for a family of four is $25,750. 

While the two measures of poverty are very similar, the Census Bureau’s poverty threshold is the measure used for this variable. In addition to being a crucial diagnostic tool for the economic well-being of a community, measuring poverty is important because it determines eligibility for various public assistance programs and services. Often, programs use 138% or 200% of the federal poverty guideline as eligibility criteria.